gasworld’s Business Intelligence provides you with the latest analysis of Air Products’ Q2 2015 earnings report.
Headlines
- Total reported sales again down -6% at $2.47bn YoY, after nearly three years of growth since early 2012.
- Operating income again showed strong growth of over +16% YoY, continuing acceleration over recent quarters. Leverage balanced from improved volumes, pricing, costs reduction and efficiency.
- Operating margin continued improving trend of recent quarters and was up over 300bp YoY – approached 20% – highest operating margin in over 25 years. Helped by top line impact of lower energy cost pass-through (around 100bp impact).
- CYQ2 performance better than projected, due to US economy performing above expectations and some Chinese plants on-stream early.
- Selling and admin costs stable at new lower level, but cost of sales down over -10% YoY.
- R&D expenditure similar to prior year.
- Further charge of $58m for restructuring and cost reduction – $24m for eliminations & pensions with around $36m for asset actions, primarily product line exits – further restructuring costs to be taken in next quarter.
- On target to deliver half of $300m overhead savings target by FY2015, and will reach full target rate during 2016. Similar $300m target savings in operational areas should be achieved over next four years.
- Renew focus on EBITDA reflected in +9% growth YoY in CYQ2 and 430bp improvement in EBITDA margin to over 30% of sales.
- Free cash flow turned positive with a significant turnround YoY.
- EPS up +13% YoY. FY2015 EPS projected to rise by around +14% despite global economy and negative currency impact
- Acquired all of shares of largest minority partner in Indura business – taking holding to 98% at cost approaching $280m.
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